This is the fifth article in a series of articles on home loans in Australia. Here you will find some up to date mortgage news and some information that will help you choose the right mortgage for your home. This article continues with an analysis of the different products available today.

Honeymoon Rate Mortgages

If you are taking your first step onto the property ladder you might benefit from an introductory rate home loan product. This type of mortgage offers a low initial rate of interest which can help reduce your monthly payments in the first crucial stages of home ownership.

By reducing the interest rate for a set period of time at the beginning of the term of the loan, you can give yourself some breathing space. Reducing your monthly repayments when you first move into a house and most likely have very little spending money aside can be a welcome relief.

The interest rate will only be reduced for a short period of time, however, so you must be prepared for some rate shock once the honeymoon period runs out. Your rate can rise considerably and suddenly and put a strain on your household budget. You need to be sure that you can afford this higher rate once it kicks in or you could get into financial trouble.

This type of home loan can also come with hefty fees. These fees can be charged at the beginning of the loan period or when the introductory rate expires. You must make sure that the fees do not cost more money than you saved in interest during the honeymoon period. If this is not the case then it might not be worth applying for an introductory rate mortgage.

Conclusion

There are many different types of mortgage products available in Australia today. The home loan market has become sophisticated and diverse ever since the finance market was deregulated. There are now more lenders in the market than ever before and this has created a competitiveness that has benefited borrowers.

Lenders have been forced to come up with flexible options on their home loan products to entice borrowers to do business with them. As we have seen, these flexible options include lines of credit, draw down facilities and packages of mortgages and other loans together. Offset accounts are also popular with savers.

There is also greater flexibility than ever before with interest rates. Borrowers can now choose between fixed rate products, variable rate loans, and mortgages that have low introductory rates. Interest rates are also competitive on standard products as there are so many lenders to choose from that buyers can switch lenders if they feel they’re being ripped off.

Investors also have more access to credit than ever before. Even investment mortgages come with flexible options now meaning that property investors benefit from the deregulation of the markets.

Home builders can also choose from a range of mortgages offered by one of many lenders on the market. Borrowers who wish to build their dream home are no longer restricted to borrowing money from their local bank branch.

As you can see, the Australian mortgage market has come a long way in recent years. There are many options available to borrowers so you should be able to find a suitable product for your home loan needs.

Author Bio: Read the latest Mortgage News and stay in touch with the home loan market at http://www.moneynet.net.au/. http://www.moneynet.net.au/

Category: Finances
Keywords: mortgage news, home loan news